Finance Minister dismisses speculation on 3% inflation target
Finance Minister Enoch Godongwana has firmly dismissed speculation that government will formally adopt a 3% inflation target, following a recent announcement by the South African Reserve Bank’s (SARB) Monetary Policy Committee (MPC).
The SARB’s MPC had indicated a preference to target inflation at 3% going forward, raising expectations that the Ministry of Finance would officially endorse this shift during the upcoming Medium-Term Budget Policy Statement (MTBPS).
However, Godongwana made it clear that “Minister Godongwana has no plans to do this.”
He emphasised that any decision related to inflation targeting lies within a formal consultative process involving key stakeholders.
“It is well-established that policy making responsibility in this area resides with the Minister of Finance, working with the President and Cabinet, who sets the inflation target in consultation with the South African Reserve Bank (SARB),” said the National Treasury.
Godongwana underscored the independence of the SARB in pursuing its mandate.
“As I emphasised during the Budget presentation, any adjustments to our inflation-targeting framework will follow the established consultation process.”
He added that this process includes “comprehensive consultation between National Treasury, the Reserve Bank, Cabinet, and relevant stakeholders, not unilateral announcements that pre-empt legitimate policy deliberation.”
“Any changes to the target, if necessary, will follow this process that I have outlined above,” he said.
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